(Editor's note: S&P Global's U.S. economists completed their forecast before the Bureau of Economic Analysis published its third estimate of first-quarter real GDP.)

As President Donald Trump approaches the end of his first six months in office, it seems that he's no closer to fulfilling his campaign promises than the day he took the helm of the world's biggest economy. And markets have begun to reflect this view, with sentiment readings, once bolstered by campaign promises, starting to soften.

Relying on the long-standing truth that campaign promises aren't (and often never become) government policy, we largely discounted last autumn's rhetoric in our December forecast for U.S. economic growth. Now, we no longer believe the federal government will be able to push through even a small infrastructure-spending package, and we expect only moderate tax cuts to be passed early next year as midterm elections approach.

Overview

The U.S. economic expansion will likely continue into the next year, albeit at a modest pace. We expect real GDP growth of 2.2% this year and 2.3% in 2018.

We expect the Federal Reserve to announce plans to gradually normalize its balance sheet in September. It will likely raise rates one more time this year, with the benchmark rate climbing to 1.25%-1.50% by December, and three more hikes in 2018.

With roadblocks still in place on Capitol Hill, we don't consider many of President Trump's proposals, as currently framed, in our baseline forecast. We expect a small tax package to pass later this year, along with reduced regulation, to help boost growth the next few years. We no longer expect a small infrastructure initiative will be passed.

We now see a 15%-20% chance that the U.S. will slip back into recession over the next year as risks of a policy mistake have eased (previously, we saw a 20%-25% risk of recession).

But even without much help from Uncle Sam, the U.S. economy continues to expand--albeit at a measured pace. S&P Global never bought into the idea that the U.S. economy could break out of its trend of annual growth of 2%-2.5% and reach the 3%-4% then-candidate Donald Trump vowed we'd soon see. At this point, we see the only way U.S. GDP growth will feature a "3" or a "4" is if those figures follow a "2" and a decimal point. Unfortunately for the new administration, much of the data bear this out.

Specifically, the latest labor-market data have fueled growing pessimism, even after strong employment gains earlier this year. The Bureau of Labor Statistics' (BLS) May report showing 138,000 job gains carries a margin of error of 50,000 jobs, widening the range to either a respectable 188,000 … or a measly 88,000. Other indicators point to a still-modest economic expansion, with bumps along the way.